Myntra's loss surges four-fold to Rs 740 Cr in FY15

Flipkart-owned fashion e-tailer Myntra incurred a loss of Rs 740 crore during the financial year 2014-15: more than four times compared to Rs 173 crore in the previous year.Digbijay Mishra | TNN | February 01, 2016, 08:16 IST

Flipkart-owned fashion e-tailer Myntra incurred a loss of Rs 740 crore during the financial year 2014-15: more than four times compared to Rs 173 crore in the previous year.

The huge loss came on the back of heavy discounting and promotional costs.The online fashion and lifestyle retailer clocked a revenue of Rs 758 crore in this period against Rs 427 crore in the financial year 2014, as per documents filed with the registrar of companies (RoC).

The four-fold increase in loss is largely due to its promotional spends, which have almost doubled to Rs 171 crore from Rs 90 crore the year before.

Most top Indian e-commerce players have been spending huge ad dollars in order to lure more consumers to shop online. Besides doling out discounts and splurging on advertising, online retailers lose money on logistics and delivery. A query sent by TOI to Myntra on its financials did not elicit a response till the time of going to press.

Besides, Myntra has not been able to shore up revenues as significantly as it had planned for the financial year 2015 even as its promotional spends have almost doubled. Most of the other top Indian e-commerce players have been spending huge ad dollars to lure more consumers to shop online. Besides, expenditure on discounting and advertising, most e-commerce players spend big money on logistics and delivery. A query sent by STOI to Myntra on its financials did not elicit a response.

Recently, though, Myntra's CEO Ananth Narayanan claimed the retailer has clocked an annualised gross merchandise value (GMV) run rate of $800 million in January. GMV is the sales made on an e-commerce platform without factoring discounts and returns.

Narayanan said the company aims to become profitable by March 2017, a timeline he had fixed to enter the $1 billion GMV club. Myntra is working on reducing discounts and optimising the supply chain cost.

As per the ROC filings, which have given out numbers till March 2015, the online retailer's parent, Flipkart, had infused over Rs 1,150 crore into Myntra since its acquisition in May 2014.

Sales hit

The Bengaluru-based company, which became the first e-commerce player to go app-only last year, saw a negative impact of the move on its traffic and sales. To arrest the dip in traffic, Myntra has now re-launched its mobile website, but transactions are still enabled on the app exclusively.

Myntra's closest rival, Rocket Internet-backed Jabong, meanwhile, lost steam sometime last year owing to multiple issues including senior level churn and inadequate funding to compete with Myntra. Jabong had reported revenues of Rs 1,083 crore in financial year 2015 over a loss of more than Rs 43 crore.